Pavel Ramón Ruiz Hernández(age 30) is a Florida resident from Broward County and was sentenced to 110 months in prison and three years of supervised release for his participation in a Ponzi fraud scheme involving MJ Capital Funding, LLC.
Ruiz wasstopped in summer 2022 and his trial was held this Tuesday. This fraudulent scheme allowed him and his collaborators to appropriate more than $42,942,000 in investor funds.
According tocourt records, from March through August 2021, Ruiz conspired with others to deceive investors, soliciting money on behalf of MJ Capital Funding to fund cash advances for merchants (Merchant Cash Advance, MCA).
The company MJ Capital Funding, located in Pompano Beach, Florida, allegedly provided short-term financing to small and medium-sized businesses through MCA. However, it was actually very different.
The company made few MCAs and did not generate enough profits to meet its promises of returns to investors. Ruiz and his accomplices recruited other people to attract new investors and paid them commissions for their efforts.
They used false and fraudulent statements to convince investors that their funds would be used to fund MCA and that the returns would be paid from the company's profits.
Instead, they ran a Ponzi scheme, using funds from new investors to pay existing investors and misappropriating millions of dollars for personal gain.
The federal prosecutorMarkenzy Lapointe of the Southern District of Florida announced the sentence this Tuesday. The case was investigated by the FBI in Miami, with the prosecution led by the Assistant United States AttorneyEric E. Morales of the Southern District of Florida.
MJ Capital Funding was the subject of an emergency order filed by the Securities and Exchange Commission (SEC) on August 12, 2021, which resulted in the temporary restriction and freezing of assets due to alleged fraudulent activities related to a Ponzi scheme.
The company, run byJohanna M. Garcia, promised investors annual returns of up to 180%, resulting in a fraud that affected more than 2,150 investors and raised at least $70 million.
In AugustJohanna M. Garcia, former CEO of MJ Capital Funding, LLC, was indicted by a federal grand jury in South Florida. It is estimated that he carried out an investment Ponzi fraud scheme, totaling approximately $190 million.
Her trial is pending but she faces a maximum sentence of 20 years in prison on each count of conspiracy, money laundering and mail fraud, if convicted.
This case highlights the importance of oversight and regulation in the investment industry to protect investors from fraudulent schemes. Furthermore, it highlights the need for investors to be cautious and conduct due diligence before investing their money in any company or investment scheme.
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